Correlation Between Western Asset and Baron Fintech
Can any of the company-specific risk be diversified away by investing in both Western Asset and Baron Fintech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Western Asset and Baron Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Baron Fintech, you can compare the effects of market volatilities on Western Asset and Baron Fintech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Western Asset with a short position of Baron Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Baron Fintech.
Diversification Opportunities for Western Asset and Baron Fintech
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Baron is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Baron Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Fintech and Western Asset is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Western Asset Diversified are associated (or correlated) with Baron Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Fintech has no effect on the direction of Western Asset i.e., Western Asset and Baron Fintech go up and down completely randomly.
Pair Corralation between Western Asset and Baron Fintech
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Baron Fintech. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 3.15 times less risky than Baron Fintech. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Baron Fintech is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,591 in Baron Fintech on September 3, 2024 and sell it today you would earn a total of 253.00 from holding Baron Fintech or generate 15.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Baron Fintech
Performance |
| Timeline |
| Western Asset Diversified |
| Baron Fintech |
Western Asset and Baron Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Baron Fintech
The main advantage of trading using opposite Western Asset and Baron Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Baron Fintech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baron Fintech will offset losses from the drop in Baron Fintech's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Baron Fintech vs. Barings Emerging Markets | Baron Fintech vs. The Emerging Markets | Baron Fintech vs. Jpmorgan Emerging Markets | Baron Fintech vs. Locorr Market Trend |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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